Wednesday, October 19, 2016

Spending Plans: A Society of Grownups Pop-Up

*Note: This post is sponsored by Society of Grownups, a Brookline-based company offering online classes and financial advice to help navigate being a grownup and encourage conversations about money, happiness, adventure, and personal values. Check out their classes and more here.

Have you ever wished that there were hip, modern resources for adults to learn important life lessons that are never taught in school, like how to invest your money, or the best way to save for your life goals? I know I have, which is why I'm so passionate about spreading the word about Boston-based Society of Grownups!

In case you missed my previous post on SoG, they have so many great resources for "adulting," from online classes, financial calculators, and an amazing blog full of financial tips and tricks! Their motto is Don't Panic, which I think sums up adult life pretty well, don't you?

I went to their pop-up Spending Plans class at Cafe ArtScience and learned so many useful, actionable tips for saving that everyone should know! Read on to see what we learned.

1. What are Your Priorities?

We learned to be more deliberate about what you spend your money on. It may sound obvious, but sometimes when you write down on paper the things you want to spend money on, and compare it with the things you actually spend money on, the two often don't align. Step 1 is figuring out what your priorities are and shifting your spending habits accordingly.

2. The Anti-Budget

This is another one that seems intuitive, but most people do the exact opposite. It kind of blew my mind. When you get a paycheck, most people will automatically pay their rent, bills etc., followed by spending for fun (shopping, restaurants, movies), and finally save whatever money is left over that pay period. Though I'm definitely guilty of this, it is not an effective way to save!

One great way to save is to again be more deliberate about where your money is going. The next time you get a paycheck, the first step should still be to pay off your rent and bills, but the second step should be to set aside a certain amount to save. This is the key! Then, whatever money is left after you have saved, you can spend on the non-essential "fun" stuff. It makes so much sense, but it's just not our default for whatever reason.

3. 50 / 30 / 20 Rule

The 50 / 30 / 20 Rule is not an exact science, but it's a good rule of thumb and starting point of how to spend your salary. 50% of your salary should go toward your "needs," that is, things you have to spend on like your rent, bills, etc. 30% should go towards your "wants," or splurge / fun purchases, and 20% should go towards your "priorities," or savings.

4. Don't Go Grocery Shopping When You're Hungry

This is a simple one that always rings true. If you go shopping when you're hungry (for food, clothes, makeup, etc.), you'll buy so much more than when you're in a good headspace! Make a list and a beeline right for the items you came for, with no detours, and you'll be able to stick to your budget much easier.

5. Get a Monthly Coffee Giftcard

For all you coffee fiends, this one's for you! Putting a monthly amount on a giftcard to your local coffee shop makes you more aware of how much you're spending, and as you watch the amount dwindle you will be less likely to add extra trips or items you didn't come in for.

6. Nickname Your Savings Accounts

Many banks will let you nickname your savings accounts. Psychologically, this may motivate you to add more money towards a goal rather than a generic savings account. You're less likely to take money out of "Puppy Fund," or "Trip to Ireland," (can you tell where my priorities lie?) than you are from "Savings XXX123." It creates an emotional tie to the account and reminds you what you're working so hard for.

7. Tie Big Purchases to Big Accomplishments

Have you been eyeing those diamond earrings for a while now? It's okay to treat yourself, but make sure you earn it first! Wait until you get a bonus or run a 1/2 marathon, then make the splurge! This makes the big purchases less impulsive and less often, which in turn will make you appreciate them more as well.

8. Online Rebates

This was a suggestion from a fellow attendee. Did you know there are stores online which will give you cash back just for doing the same online shopping you're already doing? Take advantage! A couple of these include Mr. Rebates and Ebates. Similarly, there are sites / extensions which tell you when a product hits its lowest price (like camelcamelcamel).

9. Track Your Spending

This is a big one. It's one that everyone agrees on. Track your spending with one of the many programs out there, and discover just how much you spend on coffee, shopping, books, movies, travel, you name it. Some popular options are LevelMoney.com, Mint.com, Every Dollar, and Why You Need A Budget. You can use these analytics to make changes in how you spend your money - make sure they align with your top priorities and life goals!

There you have the top spending plan tips and tricks I learned from Society of Grownups! I hope you found these as eye-opening and inspiring as I did. Be sure to check out their amazing blog filled with more adulting and financial hacks, their online classes, and financial calculators!

Comment Challenge: What do you think about the Society of Grownups? What are your tricks to spending wisely?